Self-regulatory investments among private actors in the era of regulatory capitalism: the licensing of Swedish finance and securities industry employees

Abstract

This article analyses the growth of the Swedish finance and securities industry's employee licensing programme to advance our understanding of the growth, conditions, and function of various forms of self-regulation in the era of regulatory capitalism. It examines how the situations that are significant for private actors' initiation and implementation of self-regulation are connected with the development of a particular form of self-regulation. The article argues that the licensing programme in question is an example of self-regulation characterized by impersonal trust, identity assurance, and integrity. This type of self-regulation is related to the conditions that characterized the finance and securities industry before and at the time of the initiative and its implementation, in particular, economic confidence, normalization and expansion, and increasing complexity and heterogeneity. The article is based mainly on document analysis and market statistics supplemented with interviews.In recent years, several influential studies have demonstrated that the contemporary capitalist market economy is characterized by a Bregulation explosion^that has led researchers to argue that we now live in an era of Bregulatory capitalism^ [1][2][3][4]. This refers to a multifaceted process whereby government and private actors have made significant investments in regulatory strategies with the aim of promoting market transactions [1,5,6]. In the finance and securities industry, this development has manifested itself in a strong drive to normalize securities investments, promote a Bmass investment culture^, and -to quote the Swedish Financial Supervisory Authority (Finansinspektionen; hereafter Bthe Authority^) -create a Bstock market for all^ ([7]; see also [8,9]). Private actors' own responsibility for shaping, implementing, and following up the regulation of their operations -i.e., self-regulation -has been key in [4,6,10]). The industry organization for the Swedish securities market, the Swedish Securities Dealers' Association (Svenska Fondhandlareföreningen; hereafter Bthe Association^), has been a prominent actor in this process. One conspicuous example is the Association's initiation of a programme to license Swedish finance and securities industry employees. This programme, though one of the first of its kind in the world, is not unique. During the twenty-first century, self-regulated licensing programmes for employees have developed and become a significant aspect of governance in an increasing number of securities markets. Even so, we lack studies of this kind of licensing programmes and answers to the question of why they have been realized and become an attractive form of regulation in the finance and securities industry during the era of regulatory capitalism. There is also a strong need for knowledge about the conditions that drive and shape attractive and sustainable types of self-regulation in the industry, particularly in times when self-regulation -due to financial crises and legitimation problems -i...

Influence of speculative operations on the investment capital: Anempirical analysis of capital markets

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The determinants of investment fraud: A machine learning and artificial intelligence approach

“…From the regulator's point of view, self-regulation is a way to “adopt policies which improve observable features of the activity and give the appearance of service unity” (Ogus and Carbonara, 2011 , p. 239). The focus is “directed toward promoting transparency and the ability of market participants to make informed choices” (Engdahl, 2018 , p. 580). Unease with the normative asymmetry, regulated industries, on the other hand, view self-regulation as a process that is more within their control to shape the direction of the market and ward off government intervention (Norman, 2011 ).…”

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“…Government and private agencies have made investments in SROs that aim to create fair and transparent markets (Heath, 2006 ; Weismann, 2009 ; Norman, 2011 ; Engdahl, 2018 ). The government, for its part, has delegated power to the SROs to regulate the public interests.…”

“…The government, for its part, has delegated power to the SROs to regulate the public interests. To maintain oversight, government officials have acted from a distance and encouraged SROs to enlarge the scope of their work to safeguard the financial markets (Jordana and Levi-Faur, 2004 , 2010 ; Levi-Faur, 2005 ; Weismann, 2009 ; Engdahl, 2018 ). The resultant effects are different forms of regulation: co-regulation, hybrid, state, and pure self-regulation to address problems that government officials are too distanced to address (Engdahl, 2018 , p. 570).…”